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Classification of Interest and Dividends in the Statement of Cash Flows

SSheharyar1h ago

Question:

If the question is silent (i.e. does not specify an accounting policy), how should we classify the following four items in the Statement of Cash Flows?

  1. Interest paid

  2. Dividend paid

  3. Interest received

  4. Dividend received

Should we assume all four are included in operating activities, or should we classify the payments as financing activities (interest paid because it relates to borrowing and dividend paid because it relates to equity financing), while the receipts are classified as investing activities?

What is the correct approach for all 4 when the question is silent?

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